BoS tipped to scale back Irish division

Published on Saturday 27 June 2009 13:54

SPECULATION is mounting in Ireland that the Bank of Scotland, now owned by Lloyds Banking Group, is considering scaling back its Irish division.

According to local sources, Bank of Scotland's Irish board discussed at its quarterly meeting on Friday options for reducing its Irish operation, which incurred a loss of ?250 million (213m) in 2008. The Bank of Scotland (Ireland) board is chaired by Maurice Pratt, former chief executive of Magners cider producer C&C.

A spokesman for Lloyds Banking Group refused to comment on the contents of what he said was a routine board meeting, but analysts in Ireland have raised question over the Irish division's future ever since the Lloyds takeover of HBOS last year. At the time, speculation was rife that Lloyds may choose to offload its business in Ireland and concentrate on the market in England, Scotland and Wales.

Late last year, however, Lloyds channelled ?750m of funding to Bank of Scotland (Ireland) to soften the blow of rising bad debts. Last year the Irish division wrote off ?553m on bad loans. By contrast it made a pre-tax profit of ?272m in 2007.

Lloyds is examining integration and cost-cutting opportunities across its operations but there are fears that the Irish division could be hard hit as demand for fresh loans and mortgages has plunged in Ireland.

Bank of Scotland (Ireland) employs 1,600 people. It is led by Joe Higgins who replaced Mark Duffy as chief executive earlier this year.